B-222672, B-222674, APR 14, 1986, OFFICE OF GENERAL COUNSEL

B-222672, B-222674, APR 14, 1986, OFFICE OF GENERAL COUNSEL

DISBURSING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - NOT RESULT OF BAD FAITH OR NEGLIGENCE DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICIALS UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENTS RESULTING FROM PAYEE'S NEGOTIATION OF BOTH ORIGINAL AND SUBSTITUTE MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE SUBSTITUTE CHECK, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIALS AND SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED. HOWEVER, IN THE FUTURE, WE WILL DENY RELIEF IF ARMY DELAYS MORE THAN 3 MONTHS IN PROCESSING THE DEBIT VOUCHER.

MR. CLYDE E. JEFFCOAT: PRINCIPAL DEPUTY COMMANDER U.S. ARMY FINANCE AND ACCOUNTING CENTER DEPARTMENT OF THE ARMY INDIANAPOLIS, INDIANA 46249

THIS RESPONDS TO TWO SEPARATE REQUESTS THAT WE RELIEVE TWO ARMY FINANCE AND ACCOUNTING OFFICERS UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENTS MADE FROM THEIR ACCOUNTS. WE HAVE CONSOLIDATED THESE REQUESTS BECAUSE THEY EACH INVOLVE A SUBSTANTIALLY IDENTICAL FACT SITUATION-- THE NEGOTIATION BY A PAYEE OF BOTH AN ORIGINAL AND A SUBSEQUENTLY ISSUED REPLACEMENT CHECK BY THE FINANCE OFFICER. DISCUSSED BELOW, YOUR SUBMISSIONS PROVIDE THE NECESSARY ELEMENTS FOR RELIEF, AND WE GRANT RELIEF IN EACH CASE.

IN EACH CASE, A TREASURY CHECK WAS ISSUED TO AN ARMY MEMBER OR CIVILIAN EMPLOYEE. SHORTLY THEREAFTER, IN EACH CASE, THE PAYEE REPRESENTED TO ARMY DISBURSING OFFICIALS THAT THE CHECK HAD NOT BEEN RECEIVED. A STOP PAYMENT ORDER WAS THEN PLACED ON EACH CHECK AND A REPLACEMENT CHECK WAS ISSUED TO THE PAYEE. IN ALL CASES, BOTH THE ORIGINAL AND SUBSTITUTE CHECK WERE SUCCESSFULLY NEGOTIATED BY THE PAYEE AND PAID BY THE TREASURY.

THIS OFFICE HAS AUTHORITY UNDER 31 U.S.C. SEC. 3527(C) TO RELIEVE A DISBURSING OFFICER FROM LIABILITY WHEN THE RECORD INDICATES THAT THE DISBURSING OFFICER ACTED WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY APPLICABLE REGULATIONS, THAT THERE IS NO EVIDENCE OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER AND THAT A DILIGENT EFFORT WAS MADE TO COLLECT THE OVERPAYMENT. 62 COMP.GEN. 91 (1982).

WE NOTE THAT IN B-222674, MAJOR G.W. BEECH ISSUED THE FIRST CHECK WHILE THE SECOND CHECK WAS ISSUED BY MAJOR P.E. RICHEY. THEREFORE, IT IS NECESSARY TO GRANT RELIEF TO BOTH FINANCE AND ACCOUNTING OFFICERS.

WE FIND THAT IN EACH OF THE CASES AT HAND THE REQUIREMENTS FOR RELIEF HAVE BEEN MET.

IT APPEARS THAT THE REQUEST FOR STOP PAYMENT AND THE ISSUANCE OF A SUBSTITUTE CHECK IN THESE CASES WERE WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY ARMY REGULATION. SEE AR 37-103, PARAS. 4-161, 4-162 AND 4- 164. THERE WAS NO INDICATION OF BAD FAITH ON THE PARTS OF THE DISBURSING OFFICERS AND IT APPEARS THAT ADEQUATE COLLECTION EFFORTS ARE NOW BEING MADE. ACCORDINGLY, WE GRANT RELIEF IN THE FOLLOWING CASES.

GAO # ACCOUNTABLE OFFICER DUP. PAYEE AMOUNT OF LOSS B-222672 MAJ. P.E. RICHEY MS. BRENDA JAMES $533.21 B-222674 MAJ. G.W. BEECH MS. TERRY W. DYKSTRA $725.39

MAJ. P.E. RICHEY

ALTHOUGH WE HAVE GRANTED RELIEF TO THE DISBURSING OFFICERS IN THESE CASES, WE DO NOT THINK THAT THE ARMY'S COLLECTION PROCEDURES TAKEN TOGETHER MEET THE DILIGENT CLAIMS COLLECTION REQUIREMENT OF 31 U.S.C. SEC. 3527(C). IN ONE CASE IT TOOK ARMY OVER 7 MONTHS AND IN THE OTHER CASE OVER 19 MONTHS TO REFER THESE MATTERS TO YOUR COLLECTION DIVISION. AS WE INDICATED IN OUR LETTER TO YOU, B-220836, NOVEMBER 29, 1985, WE WILL NO LONGER GRANT RELIEF IF ARMY DELAYS MORE THAN 3 MONTHS IN PROCESSING THE DEBIT VOUCHER FOR COLLECTION TO YOUR COLLECTION DIVISION. HOWEVER, SINCE THIS CASE OCCURRED PRIOR TO THE TIME SPECIFIED IN OUR NOTICE TO YOU, WE WILL NOT DENY RELIEF HERE.